Snowflakes Are Falling

Have you heard of the snowflake method of debt repayment? It’s basically a a variation of the snowball debt repayment method. Jaime over at I’ve Paid for This Twice Already says that it is “small amounts of money saved or earned that are applied directly to debt or into savings before they melt away into who knows where”. For me that works out to every $20 that doesn’t get spent paying someone or the Chinese food takeout guy. Do you know how much that stuff adds up?!

Anyway so I looked at the payments that I’ve made all over the place this month and I’ve had snowflakes go to my student loans, the car note, and the personal loan. It isn’t much but every extra payment that I’ve made went to paying down interest so that when my regular monthly payment hit more of my payments went to principal reduction instead of interest. If I can make multiple snowflake payments in a month I can steadily reduce my average daily balance which in turn reduces my interest payments. Nowhere was this more evident that the HELOC. The interest was around $125. I paid the $125 and then my tax refund payment of $700 and the full $700 when to principal. Not one penny went to interest. So next month the interest should be lower than $125 since I reduced my balance.

So would you like to join me in a snowflake challenge? Let’s see how many times we can get to $20 and send that payment off somewhere. I’m going to include any way that we make any extra money. Does someone pay you back the $5 that they owed you? Did you get an unexpected discount? Did you get a rebate check? Did you pack your lunch and save money? All of those things count. So let’s see how many times we get to $20 and check in at the end of the week. I’m counting on you all. I can’t do this alone.

Oh and if you want to learn more about snowballing and snowflaking take the primer.

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9 thoughts on “Snowflakes Are Falling”

I am right there with you with playing the 0% balance transfer game. When you have thousands in credit card debt it just makes sense if you get the offers. 3% one time fee for the transfer is nothing to pay when your finance charges on that debt are more than likely going to cost a lot more than over the course 2 months.

Congrats on your score being up as high as it is and allowing you to have the ability to get these offers during the credit freeze economy.

Remember how I planned to spend my tax return money? If you don’t read that entry. Anyway so I followed the plan and I reduced my debt while saving $3,000 for emergencies. That should cover about 1.5 months of expenses. Experts say that you need a mini

I happened upon your blog while scrolling through Yahoo! Answers, so I hope you don’t mind my invasion and/or comments.

I’m so impressed with your debt pay down plan! Kudos to you for being responsible about your debt.

We are also on a focused paydown – our current debt load, including the mortgage, is less than $50K. I’m hoping that will be gone by the end of the year. ~~crossed fingers!~~

I reviewed your concern about the $3K from your tax return. After discussing with my husband – sorry, we make financial decisions together… even when they are someone else’s 🙂 We think that if you feel secure with your current employment situation you should pay off the personal loan. It’s true that it’s good to have an emergency fund, (and it doesn’t look like you have a lot of liquid credit) however, the psychological effect of having ANOTHER of your bills gone will encourage you to reduce your other expenses further to save more.

Thanks for the response! I am so happy that you and your husband make these types of decisions together. I think you’re right about the mental benefit of seeing another 0 on the list. I just want to make sure that I am doing the “responsible” thing. For now the job is safe. 🙂 We had a company meeting where they assured us that they would make tons of cuts before considering cutting jobs. Thanks again.

holy crap! I feel like I’m in the same boat! Sandy, I’m looking to you for inspiration. I just made the bold move of MOVING back home with the ‘rents to save up. I’m fortunate that they have allowed me to do it but to say the least I feel more inspired to get my debt down and my credit up to move out. I also am a NEW YAWKA and it’s not cheap living in this town. (I wouldnt leave if you paid me tho). I am thinking of moving my 401K money that’s depleting by the second – I lost about 35% and I am thinking there has to be a better use for that money!

Sandy… good question. The fact that you’re having this delima is a good sign. It suggests that you are eager and anxious for action. I know this feeling well from my personal experience.

Knowing what I know of your situation – based on this post and your balance countdown – I’d suggest that you put away the $3k and forget you even have it unless only a true emergency strikes. I know Ramsey typically says only a 1k emer fund but you live in NYC and we are in a recession.

3k does so much more in an emergency than it does against your debt. Those are simply the numbers.

However, redirect your energy towards rationalizing you budget and making yourself irreplaceable at work.

Remember, you’re not going to win the marathon in mile 1. You’re on the right track – the numbers say that too – just stick with it and you’ll do fine.

Sandy… good question. The fact that you’re having this delima is a good sign. It suggests that you are eager and anxious for action. I know this feeling well from my personal experience.

Knowing what I know of your situation – based on this post and your balance countdown – I’d suggest that you put away the $3k and forget you even have it unless only a true emergency strikes. I know Ramsey typically says only a 1k emer fund but you live in NYC and we are in a recession.

3k does so much more in an emergency than it does against your debt. Those are simply the numbers.

However, redirect your energy towards rationalizing you budget and making yourself irreplaceable at work.

Remember, you’re not going to win the marathon in mile 1. You’re on the right track – the numbers say that too – just stick with it and you’ll do fine.

I completely understand… stick with it and you’ll be fine. As your snowbally grows so will the ‘zeros’. But your view of paying them off early is cool too. Watching the balance shrink and shrivel each month is just as much fun too.

Also, you’re only just a few weeks into this and you’re killing it. Almost 4k paid, one debt down and about 2 weeks away from knocking out the pers loan (if my math is right)… and then you’ll be under 100k a couple weeks after that… end of March it looks like.

Focus on getting a second income stream and really get after it. Set a realistic stretch goal of having everything but your 2 largest items knocked out by the end of the year… something like that.

I completely understand… stick with it and you’ll be fine. As your snowbally grows so will the ‘zeros’. But your view of paying them off early is cool too. Watching the balance shrink and shrivel each month is just as much fun too.

Also, you’re only just a few weeks into this and you’re killing it. Almost 4k paid, one debt down and about 2 weeks away from knocking out the pers loan (if my math is right)… and then you’ll be under 100k a couple weeks after that… end of March it looks like.

Focus on getting a second income stream and really get after it. Set a realistic stretch goal of having everything but your 2 largest items knocked out by the end of the year… something like that.

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